Tobacco use is the leading preventable cause of death in the world today. Developing countries are now the top tobacco-consuming nations, where men and women are addicted to tobacco at higher rates than in developed countries, and have less success stopping.

Nations have responded in domestic law by implementing warning labels and anti-teen smoking measures, and in international law through the World Health Organization’s Framework Convention on Tobacco Control.

But international law may actually be hurting as much or more than it’s helping.

Earlier this year, the World Trade Organization (WTO) ruled against US efforts to reduce teen smoking. Elsewhere, tobacco multinational Philip Morris is using international investment treaties to target so-called plain-packing laws in Australia and Uruguay. Philip Morris has also been supportive of three pending challenges of the Australian legislation at the WTO.

In this month’s Transnational Dispute Management journal, I explore the first dispute, over the 2009 Family Smoking Prevention and Tobacco Control Act. Congress saw this as a hard-won political compromise. On the one hand, it took aggressive action to reduce smoking by teens by prohibiting the sale of sweet-flavoured cigarettes. (These cigarettes are particularly appealing to people in their teenage years – the so-called window of initiation that strongly influences future tobacco addiction.) On the other hand, it took seriously the warnings made consistently by the US Supreme Court, police organisations, and economists that banning cigarettes used by adults in large numbers could have serious adverse consequences for crime. A key part of this political compromise was exempting menthol from the flavoured cigarettes ban. Health researchers have shown that menthol smokers have less elastic demand, and that many would keep smoking the products even if illegal.

The WTO ruled against the US because one of the 13 banned flavors – clove – was primarily imported from Indonesia, while menthol was regulated by other means. While equity certainly requires that developing country cigarette workers be given some consideration, the WTO appellate body (staffed by trade lawyers, not health experts) made the interests of tobacco producers the only consideration that counted. As such, they went against smart, incremental policy, and sensible cost-and-benefit weighing. Indeed, if the US wants to try to comply with the ruling without reducing the number of flavours subject to the ban, it would have to ban menthol cigarettes – something that is not feasible politically or administratively.

The implications for this ruling extend far beyond the US. The World Health Organization’s framework calls for, among other things, national prohibitions on sweet tobacco products that are appealing to teens. Over 75 countries report making progress on this front. The WTO ruling could be cited to pressure other countries’ to weaken their bans on sweet products.

The Australia and Uruguay cases are also worrying. Philip Morris is arguing that warning labels go against international law and expropriate their brand value. If successful, citizens in these countries might be faced to pay the company massive compensation – all for the privilege of regulating in ways that their own legislatures and courts have approved.

How do we get international law on the right track?

In the short run, nations will understandably focus energy on winning the cases, or limiting the extent of losses. Uruguay is mounting a vigorous defence with the assistance of the Bloomberg Foundation. We can also sidestep the international law problem by lowering demand for cigarettes, as Gates Foundation grantees are doing in China, India and Africa.

But it is untenable to have international law like the health framework conflict with international trade law. WTO and investment treaty decisions with a bearing on public health could be appealed to panels with more expertise in such matters. This would create incentives to pay closer attention the regulatory logic that every country has to sort out in addressing addiction in a way that makes sense on the ground.

Better yet, costly litigation could be avoided in the first place by having trade negotiators carve out tobacco and other health matters from trade deals. This type of firewall could go a long way towards keeping kids from lighting up.

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Tobacco giant, Philip-Morris, has recently bought actions under investor-State arbitration mechanisms in investment treaties to challenge laws limiting (in Uruguay) or prohibiting (in Australia) the display of its trademarks in tobacco packaging. This has caused the Australian government to take a strong stance against any investor-State arbitration provisions in free trade agreements (FTAs), including exemptions from the proposed investor-state settlement provisions of the Trans Pacific Partnership Agreement (TPP), currently being negotiated.  However, a closer look reveals a broad collection of older treaties that do not contain exceptions in modern treaties that could have avoided this situation. As a multinational-enterprise, Philip-Morris has attempted to evade these exceptions by going through subsidiaries to bring claims under more favorable treaties. This reveals that Australia’s new stance against investor-State arbitration may do nothing to prevent similar claims being brought in the future.

Investor-State Arbitration Provisions: Not All Treaties are Created Equal

In recent times, a vast proliferation of Bilateral Investment Treaties (BITs) and FTAs has created spaghetti bowls (and noodle bowls in Asia) with ridiculously complex frameworks for countries and investors to navigate. To date, Australia has already entered into a number of treaties that include mechanisms allowing investors to bring action against expropriation of assets, including intellectual property, outside Australia’s domestic courts. These include FTAs with ASEAN and New Zealand, Chile, Thailand, and Singapore; and BITs withArgentina, China, the Czech Republic, Egypt, Hong Kong, Hungary, Indonesia, Lao PDR, Lithuania, Pakistan, Philippines, Poland,Romania, Uruguay, and Viet Nam. The Australia – US FTA also states that the US and Australia “should consider” allowing investors to bring claims against the parties, but does not mandate it. Uruguay also has entered into treaties with investor-State arbitration mechanisms, includes BITs with the U.S. and Switzerland (in French).

Among these 19 Australian treaties with investor-state arbitration procedures (and the US treaty where it is optional), language varies concerning exceptions for limitations for intellectual property rights. The broadest language of these treaties contains two circumstances where exemptions are giving to expropriation obligations: for compulsory licenses and for “the revocation, limitation, or creation of intellectual property rights.” The language most often uses the following wording:

This Article does not apply to the issuance of compulsory licences granted in relation to intellectual property rights in accordance with the TRIPS Agreement, or to the revocation, limitation, or creation of intellectual property rights, to the extent that such revocation, limitation, or creation is consistent with [Chapter on Intellectual Property].

This language is found in the Australian FTAs with Chile, Singapore, and the US. It is also found in the US-Uruguay BIT and in the current US Model BIT (however these treaties direct to TRIPS instead of the IPR Chapter of the FTA).  The ASEAN-Australia-New Zealand FTA and the Australia-Malaysia FTA (which does not have investor-State dispute resolution) include exceptions for compulsory licenses but not for “the revocation, limitation, or creation of intellectual property rights.”

Language within the Intellectual Property Chapters of many of the FTAs and in TRIPS allows for limitations for IP rights. Excerpts concerning limitations for trademarks from these treaties are often worded similar to the following language:

Each Party may provide limited exceptions to the rights conferred by a mark, such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interest of the owner of the mark and of third parties. (US-Australia FTA, Article 11.7(5))

Additionally, TRIPS, expressly grants countries the right to pursue public health measures in relation to IPR obligations

Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health . . .  provided that such measures are consistent with the provisions of this Agreement. (TRIPS, Article 8.1)

The remaining English treaties, the Thai FTA and every Australian BIT with investor-State Dispute provisions (the Uruguay-Swiss BIT is only in French), provide no exceptions for exercising any limitation on intellectual property rights.  These treaties give multinational enterprises the biggest room to challenge national laws that relate to intellectual property rights and public policy. This is seen directly in each of Philip-Morris’s actions.

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A Quebec judge has agreed to hear the testimony of a prominent witness in a massive class-action lawsuit against Big Tobacco, a man the industry has labelled as biased and ill-informed.

Robert Proctor is a historian from California’s Stanford University who has published extensively on the tobacco industry in books and academic papers.

He’s also no stranger to tobaccolitigation, having testified in some 30 trials.

He was called to testify on behalf of the plaintiffs behind a landmark $27 billion lawsuit in Quebec that pits an estimated 1.8 million Quebecers against three major tobacco manufacturers.

The defendants—Imperial Tobacco Canada Ltd.; Rothmans, Benson & Hedges; and JTI-Macdonald—have argued that the dangerous health effects of tobacco have been common knowledge for decades and there was no conspiracy to hide it.

Justice Brian Riordan decided late Monday that he wanted to hear from Proctor. He admitted as evidence part of his 100-plus page report, which critiques other reports done by three industry-paid historians on how much Quebecers knew about tobacco risks.

Lawyers for the tobacco firms spent the day attacking Proctor’s credibility. They tried to convince the judge that the professor had an agenda beyond critiquing historians’ reports.

The judge allowed about 30 pages into the record.

As for the rest of his report—which one tobacco lawyer described as 75 pages of anti-tobacco advocacy—Riordan said he would take it under advisement.

Proctor doesn’t couch his words when describing what conclusions he draws about the tobacco industry from his research. He has described tobacco companies in writings as liars, cockroaches and cancer-mongers and he says cigarettes should be abolished.

Proctor did not hide his opinions Monday.

“I believe it is wrong for an industry to kill millions of people,” said the author, researcher and self-described public health advocate, during a hearing to determine whether he should be granted expert status.

“I’m open to alternative views, but I’m not neutral about what your client has done to the lungs of the world.”

Proctor, who has more than a quarter-century of experience, has testified in dozens of trials in the United States. He admits that he has earned more than $1 million for doing so. He has never once been disqualified from testifying.

“I’m fair, but I do think bad things have been done by the tobacco industry,” Proctor said under questioning.

“I don’t think the tobacco industry wanted to kill people. I think it was more negligence,” he added. “I’m glad they are being brought to justice. That’s a good thing.”

His testimony is the latest in a case that is described as the biggest class-action lawsuit in Canadian history.

It’s not common for experts to be excluded from testifying, one of the tobacco lawyers said. But he argued that the court had an obligation to prevent Proctor’s testimony.

“The Supreme Court has said as recently as 2011 that the court has a gatekeeper function,” said Doug Mitchell, a lawyer representing JTI-Macdonald.

He and other tobacco company lawyers argued that not only is Proctor biased, he knows nothing about Canada or Quebec, and he cites documents not in the record in his report.

Another lawyer, Simon Potter, representing Rothmans, Benson & Hedges, questioned whether Proctor’s testimony was necessary.

“Is this person, this expert, going to help the court, as an expert should, with objective, helpful advice from a specialized field when the court is unable to decide without it?” Potter said.

“I think the answer is no.”

But the lawyers representing two plaintiffs dismissed the arguments from Big Tobacco and said it wasn’t Proctor’s mandate to know Canadian tobacco history.

“Based on a lifetime’s work, you have certain ideas, based on evidence,” said plaintiff lawyer Bruce Johnston. “Surely that cannot disqualify you from working on a file because that would result in the most qualified people being excluded.”

Plenty of witnesses have already appeared before the Quebec Superior Court since the trial began last March, including numerous former and current tobacco industry executives.

The case has already heard more than 80 days of testimony with thousands of pages of documents filed into evidence.

It has taken 13 years to reach the trial phase. It stems from two cases that were filed in 1998, certified and consolidated in 2005 by Quebec Superior Court, and there were motions, delays and appeals before it got underway in 2012.

Proctor’s testimony on his report begins Tuesday morning.

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Although the number of adult smokers in the United States declined slightly between 2005 and 2011, there was no significant change between 2010 and 2011, health officials said Thursday.

Smoking dipped from 20.9 percent to 19.3 percent of the U.S. population between 2005 and 2011, but in the last year the decline slowed to 19 percent. Almost 44 million adults still smoke, according to the U.S. Centers for Disease Control and Prevention.

For the first time, the report gave details on the number of Americans with disabilities who smoke. In 2011, more than 25 percent of those with disabilities smoked, compared with about 17 percent of people without disabilities.

The report was published in the Nov. 9 issue of the CDC’sMorbidity and Mortality Weekly Report, shortly ahead of the American Cancer Society’s Great Smokeout on Nov. 15. This annual event encourages smokers to plan to quit on that day or plan to quit permanently.

The largest decline in current smoking occurred among young adults aged 18 to 24, dropping from more than 24 percent to nearly 19 percent.

That was welcome news for the Campaign for Tobacco-Free Kids, which released a statement from Matthew Myers, the advocacy group’s president.

“This augurs well for future declines in adult smoking,” Myers said. “The U.S. Surgeon General has found that nearly 90 percent of smokers start by age 18 and almost no one starts smoking after age 25, so these large reductions in youth and young adult smoking offer promise of greater adult smoking declines in the future.”

But the overall smoking rate remains a problem, said Dr. Tim McAfee, director of the CDC’s Office on Smoking and Health.

“We are making some progress, but the progress is slower than we need to see given how important the effect of smoking is on our nations’ health,” McAfee said.

Progress has slowed primarily because states aren’t funding tobacco-control programs to the levels they used to, he said.

“There has been a 35 percent decrease in funding of state programs over the last few years,” McAfee said. “These are programs that have been incredibly effective.”

These programs combine smoke-free laws, increases in tobacco sales taxes, access to smoking cessation programs and media campaigns, McAfee said.

Yet these funding decreases occurred at the same time states were taking in about 35 percent more in tobacco sales taxes, he said.

According to the report, the number of adults who smoke 30 or more cigarettes a day decreased from nearly 13 percent in 2005 to slightly more than 9 percent in 2011.

During the same period, however, the number of adults who smoke one to nine cigarettes a day increased from about 16 percent to 22 percent, the CDC reported.

McAfee said that “this is a way people have responded to higher prices and also taking to heart the message of the horrific effects of smoking on their health.”

Smoking fewer cigarettes is only a benefit if it’s a step to stopping smoking altogether, McAfee said. “Smoking fewer cigarettes is not a substitute for quitting,” he said. “If you go from smoking 20 cigarettes to 10 you aren’t cutting your risk in half.”

The percentage of Americans who continue to smoke is higher than the 12 percent goal stated in Healthy People 2020, a set of nationwide health goals established by the U.S. Department of Health and Human Services.

“If you smoke, you are losing over a decade of life on average,” McAfee said. Stopping smoking not only increases life expectancy, “it’s also increasing your quality of your life. For every smoker who dies there are 20 more smokers still alive with a serious chronic condition, like chronic obstructive pulmonary disease, heart disease or … cancer.”

Erika Sward, assistant vice president for national policy and advocacy at the American Lung Association, said that “while we have made steps forward in reducing the number of adults in the U.S. who smoke cigarettes, we are not doing what we need to do [to get] the most vulnerable populations to quit, and we are not doing what we need to do to make sure people aren’t switching to other tobacco products.”

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